Correlation Between Liberty Flour and Del Monte

Can any of the company-specific risk be diversified away by investing in both Liberty Flour and Del Monte at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Liberty Flour and Del Monte into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liberty Flour Mills and Del Monte Pacific, you can compare the effects of market volatilities on Liberty Flour and Del Monte and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Liberty Flour with a short position of Del Monte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Flour and Del Monte.

Diversification Opportunities for Liberty Flour and Del Monte

0.03

Correlation Coefficient

Liberty Flour  Del Monte

Significant diversification

The 3 months correlation between Liberty and Del is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Flour Mills and Del Monte Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Del Monte Pacific and Liberty Flour is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Liberty Flour Mills are associated (or correlated) with Del Monte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Del Monte Pacific has no effect on the direction of Liberty Flour i.e., Liberty Flour and Del Monte go up and down completely randomly.

Pair Corralation between Liberty Flour and Del Monte

Assuming the 90 days trading horizon Liberty Flour Mills is expected to generate 1.02 times more return on investment than Del Monte. However, Liberty Flour is 1.02 times more volatile than Del Monte Pacific. It trades about 0.19 of its potential returns per unit of risk. Del Monte Pacific is currently generating about 0.09 per unit of risk. If you would invest  1,610  in Liberty Flour Mills on April 24, 2025 and sell it today you would earn a total of  790.00  from holding Liberty Flour Mills or generate 49.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.23%
Values	Daily Returns

Liberty Flour Mills  vs.  Del Monte Pacific

Liberty Flour Mills

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Flour Mills are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Liberty Flour exhibited solid returns over the last few months and may actually be approaching a breakup point.

Del Monte Pacific

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Del Monte Pacific are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Del Monte unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Liberty Flour and Del Monte

The main advantage of trading using opposite Liberty Flour and Del Monte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Flour position performs unexpectedly, Del Monte can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Del Monte will offset losses from the drop in Del Monte's long position.

The idea behind Liberty Flour Mills and Del Monte Pacific pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.